Anthropic, OpenAI and Palantir: Who Gains and Who Loses in the Federal Fallout

With the largest global IT buyer’s biggest priority — AI — on the line, the stakes could not be higher

The U.S. federal government is the largest single buyer of IT services in the world, making it a critical customer target for leading providers in the space. For the current federal fiscal year (FFY), U.S. federal IT spending is estimated to approach $130 billion. Within that umbrella of spending, the Department of Defense (DOD) is not only the largest driver of spend but is also expected to see the most significant spending growth, at an estimated 5% year-to-year. Cloud-delivered options have been increasingly important to the DOD, most notably with the $9 billion Joint Warfighting Cloud Capability (JWCC) contract in 2022 and the newest iteration of the vehicle, dubbed JWCC Next.
 
The shift to cloud continues, but AI has become the clear priority for the DOD’s large and increasing IT investments over the past six months. As outlined in TBR’s 3Q25 Federal IT Services Benchmark: “TBR believes federal agencies increasingly view AI as an essential technology for enhancing mission workflows rather than as a niche, specialized tool or tool set. As such, we anticipate broadly accelerating implementation of comprehensive, agencywide AI platforms in FFY26 and FFY27. FSIs [federal systems integrators] will be tapped to not only integrate AI into IT infrastructures but also develop secure and ethically sound foundations for AI adoption.”
 
All of this is a long-winded way of setting up just how important the recent developments between Anthropic, OpenAI and Palantir are considering the implications for the largest agency (DOD), within the single largest buyer of IT in the world (U.S. Federal Government), relating to the single largest technology priority (AI).

The downside of Anthropic’s position may have broad financial impacts

Anthropic took a firm stance that the DOD could not use the company’s Claude technology for mass civilian surveillance or in fully autonomous weapons. This position caused Anthropic to lose the contract and receive a designation as a national security risk, threatening its partnerships with other providers. For Anthropic, the loss is not just the $200 million DOD agreement ceiling it won in July 2025.
 
On Feb. 12, Anthropic executives said the company’s run-rate revenue was $14 billion, and it raised $30 billion at a $380 billion valuation that same month. A few weeks later, Anthropic executives told a court the Pentagon blacklist could reduce 2026 revenue by multiple billions of dollars. Company leadership has also argued that the formal legal scope is narrower than the political rhetoric and that it should apply only to Claude’s use in direct DOD contract work, not all business with contractors. Reuters reported the Pentagon left room for exemptions in “rare and extraordinary circumstances.”
 
That means the real financial risk is probably not one canceled award but rather a pipeline contamination: Contractors derisking away from Claude, slower federal conversions, and reputational drag in defense-adjacent enterprise sales. Put differently, the $200 million ceiling is only about 1.4% of Anthropic’s disclosed $14 billion run rate, so the “multiple billions” warning has to be about second-order effects, not just the contract itself.

OpenAI gains short-term incremental revenue opportunity but should benefit even more significantly long-term

For OpenAI, the near-term revenue uplift is real but probably less dramatic than the strategic win. OpenAI’s federal posture was already building before Anthropic’s rupture. OpenAI launched and scaled usage of ChatGPT Gov, announced a $200 million-ceiling pilot with the DOD’s Chief Digital and Artificial Intelligence Office, struck a General Services Administration (GSA)-wide deal offering ChatGPT Enterprise to agencies for $1 per agency for a year, brought ChatGPT onto GenAI.mil for a platform used by 3 million civilian and military personnel, and most recently added an Amazon Web Services (AWS) route to sell models to U.S. defense and government agencies for classified and unclassified work.
 
Although the U.S. government activity is notable, it still represents a small portion of OpenAI’s overall revenue, which was rumored to have surpassed a $25 billion run rate as of early 2026. Put in this context, a $200 million government award represents only 0.8% of that run rate. However, the much bigger financial effect is strategic: Anthropic’s loss makes OpenAI the default frontier-model substitute for defense buyers, which should raise public-sector lifetime value, accelerate follow-on pipeline conversion, and strengthen valuation support.

Palantir’s position as the government AI control plane is reinforced

The impact on Palantir of the change in DOD AI provider from Anthropic to OpenAI includes a very modest short-term financial upside and, more importantly, a reinforcement of Palantir’s position underpinning U.S. government AI technologies. Palantir clearly leans into DOD engagement and lacks any qualms about the use of its technology by the military and controversial domestic agencies like Immigration and Customs Enforcement. Palantir’s revenue is also much more highly dependent on the government sector; in 2025, $2.4 billion of Palantir’s total revenue, or roughly 53.7%, was generated by government contracts.
 
Palantir’s FedStart program is an on-ramp to absorb the federal compliance burden for other vendors on a usage basis, with Palantir handling ATO (Authority to Operate) conversations, compliance artifacts, continuous monitoring and control assessments. Anthropic joined FedStart in 2025, but Palantir integrates multimodal AI and its partners with Microsoft to operationalize Azure OpenAI in classified government environments.

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